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GVK Power withdraws petition against NHAI

GVK Power withdraws petition against NHAI
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First Published: Tue, Oct 27 2009. 10 35 PM IST
Updated: Tue, Oct 27 2009. 10 35 PM IST
New Delhi: Infrastructure developer GVK Power and Infrastructure Ltd (GVKPIL) on Tuesday withdrew its petition challenging the National Highways Authority of India’s (NHAI) disqualification of the company’s bid for a highway stretch. The authority said the company was free to bid with its choice of a joint venture (JV) partner.
The company, which has interests in airports, power and highways, went to court in August this year after NHAI declared its bid for a stretch in Rajasthan invalid because it had a prior project-specific JV with one of its competitors for the project.
The authority did so based on its interpretation of a clause in the bid documents, which said companies would be found in conflict if they have had past business relationships with other bidders. This would disqualify companies that may have changed their JV partners from other projects, the authority had said.
Public-private partnership highway projects are typically executed by special purpose vehicles in which three or four firms bid as a consortium.
Company officials maintained that JVs for specific highway stretches should not be treated as a conflict of interest.
The National Highway Builders Federation has also alleged that the clause could end up disqualifying most firms and hence should be scrapped.
The clause and its interpretation have also been criticized by road ministry officials and even transport minister Kamal Nath, who on 15 October termed the situation ridiculous.
GVKPIL counsel Ramesh Vaidyanathan said the company received a letter from NHAI last week saying it was free to bid for highway projects with any JV partner, leading to the company withdrawing its complaint.
A transport ministry official said that the highways authority had recently been given the mandate to decide on changes to the bid documents. Highways authority officials could not be reached for comment.
Manish Ranjan contributed to this story.
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First Published: Tue, Oct 27 2009. 10 35 PM IST